Why Your Small Business Needs an Employee Handbook

As a small business owner, you may think that employee handbooks are only for large companies and corporations. However, if you answer yes to any of the following questions, you would benefit from having an employee handbook.

Do you have staff members who question you about vacation time or sick leave?

Have you created some policies for the effective running of your company?

Is there a certain way you would like your employees to dress?

Is there a process for promotion or advancement in your business?

An employee handbook is an important tool for running a successful business of any size. It contains basic information about what your company expects from its employees and what your employees can expect from your company. Here are the top three reasons why your small business needs an employee handbook.

Clarifies Policies and Procedures

As a small business owner, you may have built your company from the ground up, learning as you go. You may not have been able to spend the time thinking through the why and the how of what you do each day. One of the best benefits you can gain by creating an employee handbook comes from the actual process itself.

When you take the time to review your policies and procedures and to get them down in written form, it will help your company run more smoothly. An employee manual will also help your company avoid inconsistencies.

With clear directions from management on how to handle specific work situations in place, you and your staff will be able to make prompt and impartial decisions. For example, let’s say a new staff member shows up chronically late. When you have an existing policy on tardiness in your manual, you do not have to make uncomfortable on-the-spot judgment calls.

When employees are required to read the manual, sign a statement that they agree to abide by it, they know exactly what they need to do to remain employed with your company. A written policy removes opportunity for ambiguity, which can cause hurt feelings – especially in a small firm.

Offers Legal Protection

An employee manual also can help protect your company against possible legal action. If your employee policies are vague, it can open you up to litigation in certain circumstances.

On the other hand, if you pay careful attention to the content of your employee manual, the handbook can help you defend your actions in a variety of business situations. These situations can include hiring and firing actions, safety procedures, harassment, vacations and sick leave and more.

Ask your attorney to review your handbook to make sure that you are following federal and state legal requirements as an employer.

For instance, there are federal and state labor laws that require you to provide certain information in writing to your employees. Failure to comply may result in fines, penalties and lawsuits. One example is a family medical leave policy. Depending on your company’s size, there may be federal and state laws that grant a certain amount of unpaid days off for severe illness, caring for an ill family member or the birth of a child.

Most states also require you to provide details about your workers’ compensation and anti-discrimination policies. Be sure to check your local and state laws on military leave, the rights of disabled workers, breastfeeding policies, crime victim leave and jury duty leave, and then provide clear details in your handbook.

Sets Standards for Employee Behavior

A well-written handbook can serve as a motivating force for positive employee behavior. Your handbook is a reflection of your company’s core values. When you include your company history and mission statement in the handbook, your employees will gain valuable information about your priorities as an employer.

These values and priorities can help steer your employees towards the kind of teamwork you desire. As your company grows, you cannot be in all places all the time. The handbook will help staff members be able to make sound decisions in your absence.

An employee handbook also can help you maintain your company’s image. Today’s handbooks should include clear information about digital conduct. Your handbook can stipulate everything from how the company should be portrayed in social media, to email etiquette, to password security guidelines.

Your handbook can serve as a motivating tool for your staff. In addition to including information on working hours, time off for illness, emergencies and vacation and dress codes, your handbook can offer specifics on promotions and raises. These clearly defined policies can motivate workers by revealing how their hard work and dedication can pay off.

Some small business owners may worry that it may be difficult to change policies once they are in writing in a handbook. Yes, changing an existing policy and communicating that change to employees may take some time and attention to detail. However, that hurdle is a small one compared with all the benefits of having your ongoing policies and procedures in a handbook.

In fact, you should plan to review your handbook at least once a year for any needed changes in order to keep it up-to-date with any new laws and to keep it relevant for your growing small business.

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by Tricia Drevets //
Regular Contributor to Businessing Magazine. Tricia Drevets is a freelance writer who specializes in business and communication topics. A community college speech and theater instructor, Tricia lives in beautiful Southern Oregon.